Markets met today’s closing bell flat today, off session highs, but still enough for the Dow to hit another record high close this afternoon. This marks the seventh all-time high on the Dow 30 this month alone — the index is +6.4% over this time, and now sits at 37,710 (it had been 64 points higher only minutes before, but nosedived into the close, like the Nasdaq and S&P 500 did). We were mixed overall: the Dow was +0.14%, the S&P +0.04%, but the Nasdaq closed -0.03% and the small-cap Russell 2000 — down below the rest of the pack all day — was -0.38% for the session.
This morning, we discussed this year’s Santa Claus Rally losing some steam. This was less about accurate prognostication than it was an honest glimpse at stock valuations. The Nasdaq is +45% year to date, while the S&P 500 is +25%. The Russell is +17.5% — it had been negative going back to just mid-last month — and the Dow brings up the rear with a more-than-respectable +13%. The Dow is striking new all-time highs (not seen in almost two years, by the way), and the S&P is too, but we’re still off November 2021 all-time highs on the Nasdaq and Russell.
Part of this narrative going forward — aside from the all-important Fed interest rate policy — will depend on the labor market in 2024. While we’ve seen employment cool down considerably from the 472K new jobs posted back in January (which today looks definitely like an outlier), we’re still well above the levels we need to replace the retiring Baby Boomers, now close to 100K per month. Last month we saw 199K new jobs filled; our December report comes out a week from tomorrow.
This morning’s Weekly Jobless Claims continue to behave well, also. We saw a slight uptick in new claims last week, but well off the summer highs which appeared as if the labor market was about to take a big hit. These figures came back down to an average of around 220K — still consistent with strong employment. Longer-term claims are definitely up from 1.7 million we saw back in early October, but off the 1.9+ million we saw mid-November. Since then, we’ve been sub-1.88 million four weeks in a row.
The housing market will also e a key narrative in 2024, and this morning’s Pending Home Sales for November came in unchanged — down from expected gains of +1.0%. Just as rising mortgage rates in October (to 8% on average) did not have a negative effect on Case-Shiller home prices earlier this week, neither did lower mortgage rates (7.25-7.50% on average) last month. Pending Home Sales are -5.2% from year-ago levels, and higher mortgage rates — a direct result of higher Fed interest rates — are clearly the biggest reason. Should mortgage rates continue to fall — say, to 6% or even 5% — then next year may see a boom in housing, as pent-up demand is sated.
We have a full day on the stock market tomorrow, though bond markets will close early. It will obviously be the final trading day of 2023, and we’re sorry to see it go. Here’s to health and prosperity in the new year for all of our Zacks family!
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Labor, Housing Stay Healthy Going into 2024
Markets met today’s closing bell flat today, off session highs, but still enough for the Dow to hit another record high close this afternoon. This marks the seventh all-time high on the Dow 30 this month alone — the index is +6.4% over this time, and now sits at 37,710 (it had been 64 points higher only minutes before, but nosedived into the close, like the Nasdaq and S&P 500 did). We were mixed overall: the Dow was +0.14%, the S&P +0.04%, but the Nasdaq closed -0.03% and the small-cap Russell 2000 — down below the rest of the pack all day — was -0.38% for the session.
This morning, we discussed this year’s Santa Claus Rally losing some steam. This was less about accurate prognostication than it was an honest glimpse at stock valuations. The Nasdaq is +45% year to date, while the S&P 500 is +25%. The Russell is +17.5% — it had been negative going back to just mid-last month — and the Dow brings up the rear with a more-than-respectable +13%. The Dow is striking new all-time highs (not seen in almost two years, by the way), and the S&P is too, but we’re still off November 2021 all-time highs on the Nasdaq and Russell.
Part of this narrative going forward — aside from the all-important Fed interest rate policy — will depend on the labor market in 2024. While we’ve seen employment cool down considerably from the 472K new jobs posted back in January (which today looks definitely like an outlier), we’re still well above the levels we need to replace the retiring Baby Boomers, now close to 100K per month. Last month we saw 199K new jobs filled; our December report comes out a week from tomorrow.
This morning’s Weekly Jobless Claims continue to behave well, also. We saw a slight uptick in new claims last week, but well off the summer highs which appeared as if the labor market was about to take a big hit. These figures came back down to an average of around 220K — still consistent with strong employment. Longer-term claims are definitely up from 1.7 million we saw back in early October, but off the 1.9+ million we saw mid-November. Since then, we’ve been sub-1.88 million four weeks in a row.
The housing market will also e a key narrative in 2024, and this morning’s Pending Home Sales for November came in unchanged — down from expected gains of +1.0%. Just as rising mortgage rates in October (to 8% on average) did not have a negative effect on Case-Shiller home prices earlier this week, neither did lower mortgage rates (7.25-7.50% on average) last month. Pending Home Sales are -5.2% from year-ago levels, and higher mortgage rates — a direct result of higher Fed interest rates — are clearly the biggest reason. Should mortgage rates continue to fall — say, to 6% or even 5% — then next year may see a boom in housing, as pent-up demand is sated.
We have a full day on the stock market tomorrow, though bond markets will close early. It will obviously be the final trading day of 2023, and we’re sorry to see it go. Here’s to health and prosperity in the new year for all of our Zacks family!
Questions or comments about this article and/or author? Click here>>